Europe midday: Stocks higher after positive ECB message, euro rallies

European stocks were in the green on Friday, gaining from the European Central Bank's positive message the previous session, while the euro rallied and oil prices recovered from record lows.

At midday, the benchmark Stoxx Europe 600 index was up 0.45% to 374.55, Germany’s DAX rose 0.63% at 12,054.02 and France’s CAC 40 was 0.63% higher to 5,012.69.

The euro continued its surge from Thursday after European Central Bank president Mario Draghi said that there was “no longer that sense of urgency” in taking further action against the risk of deflation in the Eurozone.

The central bank indicated that the key to a consistent recovery in inflation would be centred on employment and wage growth.

Draghi sounded slightly more hawkish than expected and that the “ECB is expected to reveal a tapering plan in September, if the eurozone’s political picture is stable and the inflation is on a solid path toward the bank’s 2% mandate target”, said Ipek Ozkardeskaya, senior market analyst, at London Capital Group.

In currency markets, the euro rose 0.3% against the dollar to 1.0609 and was up 0.46% versus the pound to 0.87347.

Meanwhile, oil prices rebounded after finishing at the lowest in over three months on Thursday following higher-than-expected US inventory data raised concerns of oversupply and sparked a sell-off.

West Texas Intermediate was up 0.48% to $49.52 a barrel - it went below the $50 mark for the first time in 2017 on Thursday - while Brent crude rose 0.47% to $52.44.

Elsewhere, investors were also eyeing the US non-farm payroll report to be published at 1330 GMT. The report comes on the back of strong ADP employment data and, barring anything big, it is expected to cement an interest rate hike by the US Federal Reserve next Wednesday.

On the data front, Germany's foreign trade surplus fell to its lowest level in 12 months to €18.5bn in January from €18.3bn the previous month, ahead the €18bn expected. Imports rose 3% month-on-month, while exports increased 2.7%.

French manufacturing output fell 1% in January after a 1% drop the previous month, and below expectations of a 0.5% rise. Year-on-year manufacturing fell 1.3% from a downwardly revised 0.1% rise in December. Overall French industrial production declined 0.3% from 1.1% in December.

In corporate news, Repsol was after the Spanish oil company said on Thursday it had discovered a giant oil field in Alaska.

Volkswagen gained 1.44% after the German carmaker said it would plead guilty in US courts to three counts of felony as part of a plea agreement with regulators over the diesel emissions scandal.

UBS rose 1.06% after the Swiss bank said it lowered the pay for its former chief executive last year.

Segro fell 4.05% after the property developer launched a rights issue to raise £5873m and will be a remaining stake in joint venture for a property portfolio near Heathrow Airport.